Many businesses are raising questions about the Internet of Things, wondering if and when the hype will become a reality. The buzz is increasing significantly, and there are increased signs of vendor activity. For example, Samsung recently announced its introducing numerous, long-term initiatives that dive deeper into the IoT space. One the other hand, we’ve seen many early IoT startups go out of business. The inconsistency is a sign that mainstream consumer adoption is far from taking off – but for how long?
While the potential for IoT adoption is ultimately great, there are numerous challenges that need to be addressed before IoT can live up to all the hype:
Data Security: This is a well-documented barrier to IoT and arguably the most critical. While this challenge can largely be addressed by technology, it will still take some time for consumers to become consciously ready to allow more and more devices to capture, store and transmit their personal data.
Closed Systems And Lack of Standards/Governance: While technological advances have led to a multitude of Internet-enabled devices, the fact is most of these devices have their own closed ecosystems that make it difficult for them to talk to each other. The machine-to-machine (M2M) space is also fragmented. Right now, IoT development is happening in silos, and in very narrow use cases by vertical. For IoT to grow significantly and reach its true potential, there has to be at least some level of seamless movement of data among IoT systems, as well as IoT system support. This is difficult in the currently siloed scenario, and it will get even more complicated with global expansion.
IP Address Availability: IoT projections indicate billions of devices will get connected, which implies there is a need for billions of IP addresses. With IPv4 addresses running out, and IPv6 adoption growing much slower than anticipated, there will be big challenges without quick fixes.
Storage Challenges: The data that will be generated by IoT systems will far exceed what’s considered “big data” today. Significant investments will need to be made for storing, managing and sharing all this data. Current storage technologies and associated costs of storage are a major impediment to IoT going mainstream.
Connectivity Challenges: Since all pervasive free WiFi and alternative Internet pipes are still not a reality, IoT will need devices to connect over Internet pipes owned by a near-monopoly of telecommunication service providers. There is a real concern that telecos will incorporate premium pricing into the current systems and find new ways to monetize the Internet pipes through direct customer billing. If this happens, it could serve as a major barrier to IoT, at least in the next two to three years.
Data Ownership and Access: It’s unclear today who will own and control the access to IoT data once it grows beyond siloed systems and becomes mainstream. Monopoly of data ownership could lead to multiple issues related to privacy and misuse. In the current scenario, data ownership seems to remain with manufacturers of IoT systems. To a large extent, consumers are unaware what type of data IoT systems can capture. In the near future, we could see others in the value chain, such as app developers and telecommunication companies, stake claim to the data.
Unproven Consumer Needs: For the most part, there isn’t a pressing consumer need IoT addresses, despite the many use cases that have been outlined and publicized. While there is interest and curiosity on what a super smart refrigerator can do, the fact is that most consumers do not have a real need for such a device.
Defining ROI: IoT components and systems are expensive since the industry isn’t yet mainstream. For consumers, IoT-enabled devices come at significant costs. This applies to existing IoT-enabled products, such as consumer wearables or cars, or new IoT-based products, such as smart home automation devices and health monitors. As far as businesses are concerned, there are few actual use cases of real ROI. When it comes to putting money behind IoT, businesses need proof of viability and profitability more than buzz and excitement.
It’s evident these IoT challenges are interconnected and interdependent, so addressing them together rather than individually can help boost the need for IoT, as well as adoption. However, this does call for a significant mind-set shift in the vendor community. Currently, most vendors aim to make money from IoT in accordance with their current business models rather than driving a fundamental disruption and generating long-term revenues from completely different models. Unless this shift happens, IoT will remain a buzzword and miss its true potential.